New Era, New Rules: How to Emerge Stronger in a Post-COVID World

With no sign of COVID-19 abating, and with the pandemic surpassing all traditional benchmarks, businesses need to prepare for a paradigm shift in the “new normal”.

Between 1918 and 1919 the Spanish Flu killed around 50 million people in three deadly waves, infecting more than 500 million people. It was one of the deadliest pandemics in recent history. But it did have a transformative impact on society, leading to fundamental changes in health, culture and business.

COVID-19 has now emerged as a worthy successor, unleashing a calamity of unprecedented proportions. With the current case count at more than 29 million and countries experiencing a second or even a third wave, any attempts to mitigate and/or contain the impact of this crisis have proved marginally successful. The developing nations seem to be taking the brunt of it. India has seen its case count rise to 4.8 million, a number almost equivalent to Europe’s total toll.

The economic impact of this crisis has been catastrophic. In India, for an example, the real GDP growth fell to -23.9% in Q2 2020 (vs. 3.1% in Q1 2020). It is estimated that the COVID-19 crisis will also drag African economies into a fall of about 1.4% in GDP, with smaller economies facing a contraction of up to 7.8%.

The ultimate impact of this virus still remains uncertain, with recovery dependent on many factors such as the time needed to develop and distribute a vaccine, the strength and stability of the health care systems, the depth of economic disruption and fiscal support from governments, among others.

Has the way we do business changed forever?

As we head into October, and with several phase-3 vaccines trials underway, fiscal stimulus packages are being enacted by governments across the world. Economists are optimistic of an economic rebound in 2021. However, the outlook varies across the developed and the emerging ASEAN region.

Despite the mixed outlooks, now is the time for countries and companies to focus on reimagining the future in a post-COVID environment. Some of the long term strategies and changes needed to build a robust foundation and prepare to emerge stronger in a post-crisis environment involve: an acceleration and integration of digital practices, improving supply chain flows, investment in healthcare (both through the public and private routes), defining new safety practices for workplaces, educational institutions and so on.

At Perun Consultants, we have identified five areas where we can help business owners and management work towards building a more resilient and efficient framework for coping and countering the effects of COVID-19.

1. Distress/stress scenario planning
   The shock of such an event can undermine any healthy, profitable business. Although corporates may try to prepare for changes in customer preferences and technological advances, such unforeseen catastrophes or force majeure situations are a challenge to predict. Furthermore, the impact on each industry and company is different: for instance, the service and travel sectors might be more deeply affected than the telecom or pharmaceutical sectors. To test if a company lies in the high-risk sectors or has a balance sheet resistance to such scenarios, Perun Consultants can undertake stress testing of the entity’s market and financial capabilities.

2. Business and financial restructuring
   Post-impact performance improvement and restructuring can also be undertaken with a focus on balance sheet improvement, liquidity management, debt restructuring involving negotiations with creditors, asset sales (if needed), and litigation support in the case of disputes.

3. Financial advisory services
   As companies attempt to resurface post crisis and need financing, they can leverage our connectivity in the investment community, enabling small and mid-cap entities in fund raising. Undertaking valuation of their businesses, for raising equity or sale of their existing business, as well as preparation of a contingency financial funding plan, such as additional working capital lines or collateralized loans, are part of the comprehensive package of services we can offer.

4. Board management support
   Responsible leadership in such scenarios is extremely critical and a balanced management reinforces confidence. The presence of independent directors on the board ensures there are professional and experienced representatives and a voice for all stakeholders. With the risk of personal liability high in such scenarios, many other firms baulk at offering such services. In the unfortunate circumstances where the company’s leadership is impacted by the illness, such independent directors ensure a reliable succession plan.

5. Receivership appointments
   In a worst-case scenario, with limited prospects of recovery, we can act as a receiver to help the management, shareholders and lenders liquidate assets in an effective and efficient manner to ensure all liability claims are satisfied.

Is your business prepared for the impact of COVID-19? Please contact us for a confidential chat about how we could help your business during the pandemic.